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A Proposed Register of Persons holding a controlling interest in land in Scotland

As part of the Scottish Government’s commitment to improving transparency of land ownership in Scotland, they have opened a public consultation on the proposed draft regulations to establish a register of persons holding a controlled interest in land in Scotland.

What does this mean?

As required by the Land Reform (Scotland) Act 2016, these new regulations (being the Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) (Scotland) Regulations 2021) propose to establish a new register of persons holding a controlled interest in land aimed at increasing public transparency in relation to the individuals who control the decision making of landowners and tenants (of registrable leases i.e. over 20 years) in Scotland. It is proposed that such a register will ensure that there can no longer be categories of owners, where, intentionally or not, control of decision making is obscured. This could include where the true owner is hidden behind corporate structures, which can sometimes be based overseas.

Alignment with South of the border

In a positive move, the Scottish Government appear to be looking to align their timetable for this new register with the UK Government’s timetable for the Register of Overseas Entities’ Beneficial Owners, which will apply to overseas companies that own land anywhere in the UK or who bid for central government procurement contracts, with the proposed commencement date being 2021. As part of the consultation the Scottish Government has emphasised the importance of the two registers complimenting each other and avoiding duplication and as a result the potential to make Scotland less attractive location for property investors.

What sets the two registers apart is the fact that the Scottish Register will go much further than the English equivalent, as there will be a wider ambit, and will include trusts, partnerships and “associates” who are “responsible for the general control and management” of a property. Would this be applicable to managing agents who have a similar level of control? This is still to be determined, and is a point that will likely generate some debate.

What the result of the consultation will be, and whether the proposed register will deliver the desired outcome is still to be seen, but greater transparency in terms of ownership should not be a bad thing.